Options and Futures in Market Risk Management for Financial Entrepreneurs in USA & Europe
Abstract
Derivative markets have, over time, become increasingly important in the world of finance and banking. The two main products that are traded in the derivatives market are options and futures. Since they are derivatives, they do not have value on their own; their value comes from an underlying asset. It is therefore possible to see that options are far better when it comes to managing risk associated with price movements. This is due to the fact that they are more accessible, flexible as well as capital efficient. Furthermore, they provide unique opportunities and can be used for both hedging and speculating due to the fact that they allow for advanced strategies.
Keywords: Options, Futures, Market Risk Management & Financial Entrepreneurs
References
Aliravci, M. (2013). Margin call risk management with futures and options (Doctoral dissertation, Middle East Technical University)
Chance, D. M., & Brooks, R. (2015). Introduction to derivatives and risk management. Cengage Learning.
Dismukes, R., Bird Jr, J. L., & Linse, F. (2014). Risk management tools in Europe: Agricultural insurance, futures, and options. US-EU Food and Agriculture Comparisons.
Hammoudeh, S., & McAleer, M. (2013). Risk management and financial derivatives: An overview. The North American Journal of Economics and Finance, 25, 109-115.
Hull, J., Treepongkaruna, S., Colwell, D., Heaney, R., & Pitt, D. (2013). Fundamentals of futures and options markets. Pearson Higher Education AU.
Kalyan, D., & Bala, N. (2020). Operations of Futures and Options with Reference to India Infoline Ltd, India. India.
Sailakshmi, P., & Chandravat, K. (2019). A Study on Derivatives, Futures and Options.
Van der Auwera, E., Schoutens, W., Giudici, M. P., & Alessi, L. (2020). Futures and Options on Cryptocurrencies. In Financial Risk Management for Cryptocurrencies (pp. 85-95). Springer, Cham.
Williams, J. C. (2019). Commodity futures and options. Handbook of agricultural economics, 1, 745-816.
